The AUD/USD pair starts the new trading week in a bullish consolidation phase, fluctuating within a narrow range near the monthly high set on Friday, awaiting momentum from central bank actions this week.

The Reserve Bank of Australia (RBA) is set to announce its interest rate decision on Tuesday. The central bank is expected to keep rates at their current level while focusing on inflation control. Moreover, last week, RBA Governor Michelle Bullock acknowledged that inflation has not yet reached the target range of 2–3% annually. Australia's economy is exhibiting the fastest growth in two years, and a stable labor market adds confidence in the potential for rate increases next year. These expectations sharply contrast with the U.S. Federal Reserve's dovish outlook, which constrains dollar bulls and creates additional tailwinds for the AUD/USD pair.

Recent macroeconomic indicators from the U.S. indicate a gradual slowdown, and statements from Fed officials suggest a rate cut in December is almost inevitable. According to CME FedWatch data, the probability of a 25 basis point rate cut on Wednesday is currently estimated at nearly 90%. However, investors prefer to wait for additional signals regarding the course of the cuts before opening new positions. This leads to restrained dynamics in the AUD/USD pair. Consequently, the market will continue to monitor updated economic forecasts and comments from Fed Chairman Jerome Powell during the press conference following the meeting.

In the meantime, China's trade balance data has affected the Australian dollar and the AUD/USD pair. The current fundamental backdrop leans towards a bullish sentiment. As a result, any significant pullbacks may be seen as buying opportunities and are likely to be moderate in nature.

From a technical perspective, last week's breakout of the 100 and 200 SMA on the 4-hour chart favors the bulls. Oscillators on this chart are also positive. On the daily chart, oscillators are positive too, but the Relative Strength Index is nearing the overbought zone, suggesting a potential correction. The nearest resistance is at the monthly high around 0.6650, with the next level at 0.6660. The pair has found support at 0.6620, with the next support at 0.6610, before the round level at 0.6600. However, as long as the oscillators remain positive, the path of least resistance is upward.